March 19, 2010 Volume 111 Number 6

Joblessness worse than stats reveal

While it’s no secret that 9 million U.S. jobs have disappeared since the recession began in December 2007, real unemployment is much worse than it might sound judging by official statistics.

Officially, unemployment was 9.7 percent nationwide in January 2010: 14.8 million U.S. workers were counted as unemployed, and 6.3 million of those had been out of work for over six months.

Fairview, Oregon resident John Rabbai has been jobless since his December 2008 layoff at a union-represented industrial laundry. At first, employers would tell him they weren’t hiring but would take his application. Now, said the former UNITE HERE shop steward, some won’t even accept applications. In February, he learned his benefits would be suspended because Congress hadn’t reauthorized extended unemployment benefits.

“I feel like American workers have been abandoned,” Rabbai said.

There’s much about the extent of unemployment that the official statistic doesn’t capture. The most widely-reported unemployment number is generated by a pair of monthly surveys of 60,000 households and 410,000 worksites, conducted by the U.S. Census Bureau for the U.S. Bureau of Labor Statistics (BLS). But only those who weren’t working — and had looked for work in the previous four weeks — are counted as “unemployed.”

Another 1.7 percent, 2.5 million people, were classified as only “marginally attached to the workforce” because they’d looked for work in the last year, but not in the last four weeks. And 1.1 million of those, 0.7 percent of the workforce, were categorized as “discouraged” workers — “persons not currently looking for work because they believe no jobs are available for them.”

Then there are 8.3 million Americans (5.3 percent) in the survey who were working part-time because they couldn’t find full-time work.

Add those all up — unemployed, marginally attached, and underemployed — and you get 16.7 percent of the workforce experiencing whole or partial unemployment as of January. And that still doesn’t describe the extent of the crisis.

Unemployment is expressed as a percentage of the workforce, but many would-be workers are leaving the workforce. In a bad economy, getting out or staying out of the job market is a rational response. Laid-off workers go back to school, or they take children out of paid day-care and become stay-at-home moms or dads. High school grads remain in their parents’ homes. College grads and laid-off young adults move back in with their parents.

And older laid-off workers retire early, if they’re eligible. Last year, 2.7 million people applied for Social Security retirement benefits, a surge of 20 percent over the year before. According to a January 2010 report by the Urban Institute, a Washington, D.C.,-based think-tank, the surge was due in part to the inability of many seniors to find work.

High unemployment can turn off the pipeline for new workers entering the trades. Building trades unions can’t take in new apprentices if there are no construction jobs on which to train them. Operating Engineers Local 701, based in Gladstone, has been closed to new apprentices for two years, said Assistant Business Manager Nelda Wilson, and half of the union’s existing apprentices are unemployed.

At Portland-headquartered International Brotherhood of Electrical Workers (IBEW) Local 48, 700 members are on the out-of-work list, and a couple hundred have been on it over a year. With too little local work on the horizon, Local 48 Business Manager Clif Davis has assigned a staffperson full-time to help members apply for passports and work permits to seek jobs in Canada; 120 members are looking at relocating to Alberta, where oil exploration is fueling a construction boom.

Official unemployment statistics also don’t capture the extent of mis-employment, the mismatches that a high-unemployment economy creates. A skilled machinist hires on at Home Depot. An architect takes a bottling job at a distillery. A journeyman carpenter does odd jobs as a handyman. When employment picks back up, those overqualified workers may return to the job markets they left.

Bad job markets cause job-seekers to lower their expectations. Mark Taylor, 39, has been jobless since a January 2009 layoff from Freightliner’s Portland truck plant, where he’d worked since 1994. Since the layoff, Taylor has applied for work on a road crew, at the Water Bureau, and elsewhere, but his job search is haunted by the memory of the $22.75-an-hour he earned on the truck assembly line, and he still calls Machinists District Lodge 24 regularly to see if Freightliner might recall any workers.

“It’s hard for me personally to accept an $8-an-hour job,” Taylor told the Labor Press. “But then I think, ‘You have to start over.’”

In December, Taylor got an interview — for a $9-an-hour job at a produce plant in the Rivergate Industrial District. But the interviewer expressed a concern — that he would jump ship if Freightliner offered recall — and Taylor never heard back.

High unemployment affects those who do have jobs, too. Fearing the unemployed are eager to take their place, the employed may be less likely to ask for raises, and more likely agree to wage cuts. And they may stay in jobs they dislike: The incidence of workers quitting jobs declined dramatically in 2009, the Congressional Budget Office reported in February.

Lastly, the official statistic disguises an important fact: Unemployment is spread very unevenly, and the jobless rate can differ dramatically depending on what job market you’re in. A February 2010 study by Northeastern University’s Center for Labor Market Studies found that a disproportionate share of job losses in the current recession are being borne by men (and black men in particular), by young workers under 30 (and teenagers in particular), by less well educated workers, and by blue collar workers (in crafts, production, transportation, material moving, and general labor). On the other hand, four-year college graduates, professional workers, managers, and government employees have been relatively well protected from job losses.

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